A worker carries material to the steel frame of the future Panera Bread in the Central Vermont Shopping Center in Berlin. Panera's building permit was approved, although other future development at the shopping complex may be at risk due to updated flood maps.

BERLIN — The recent rebirth of a commercial strip once dubbed Berlin’s “Million-Dollar Mile” could be hampered by local flood-related restrictions that exceed federal standards.

So say some who own property along the Barre-Montpelier Road — a group that has urged the Select Board to nudge the Planning Commission to revisit an ordinance approved by voters in March.

Although the ordinance allows for “redevelopment” in the flood plain, it essentially prohibits “new development” — a change that almost scuttled plans to construct Panera Bread at the Central Vermont Shopping Center and may have stalled a proposal to build a CVS Pharmacy near the intersection at the base of the Berlin State Highway.

Both the restaurant that is under construction and the pharmacy that isn’t are located in the town’s highway commercial district. Most, if not all, of that district, which runs along the Stevens Branch of the Winooski River, is in the flood plain.

If not for a 13-year-old permit that was issued for a bank that was never built, Pomerleau Real Estate’s plans to lure Panera Bread to the shopping plaza would have been barred by an ordinance that some property owners and their representatives have claimed was adopted without their knowledge or input.

The ordinance, they say, is excessive and unnecessary and should be modified, at least with respect to the Barre-Montpelier Road, where many of the more than 200 affected parcels are located.

The change also affected the Route 12 corridor between Montpelier and Northfield, a short section of Route 2 and the Montpelier Junction area.

Ron Lyon, a local resident who was the engineer Pomerleau hired for the Panera Bread project, was among those who spoke last week in favor of a compromise that would make new development a conditional use in the highway commercial district.

“It would address the main corridor that has been used for development historically,” Lyon said, suggesting there is room for additional development on the Central Vermont Shopping Center property.

The shopping center — which is anchored by Big Lots and is preparing to welcome Jo-Ann Fabric and Craft as its newest tenant — flooded during a May 2011 storm. Lyon stressed that any new development, Panera included, still must be flood-proofed in accordance with Federal Emergency Management Agency standards even if the ordinance is relaxed.

Lyon said the more rigid regulations that voters agreed to went further than is necessary to ensure the town can continue to participate in the federal flood insurance program.

“It is a very restrictive ordinance,” he said.

According to Lyon, recent activity along the Barre-Montpelier Road — including the construction of Auto Zone, the relocation of Staples and the Panera project — has created momentum that could be stymied if the regulations aren’t relaxed.

“This (ordinance) has the potential for shutting that (interest) back down,” he said.

Randy Rouleau, who owns property along the Barre-Montpelier Road, agreed.

“This could be a huge loss to the town,” he said. “There’s a lot of land in the flood plain.”

Rouleau initially challenged the Panera permit but dropped his appeal when Pomerleau agreed to join him in calling for a change to the flood plain regulations.

According to Rouleau, the new regulations were the product of an under-the-radar process.

“The Planning Commission struggled through and adopted these regulations without any input from the landowners,” he said. “Shame on us, we didn’t know.”

According to Town Administrator Jeff Schulz, state officials initially indicated that allowing new development in the flood plain would be unacceptable. The state has since “softened its position” and now appears willing to allow new structures to be built in already developed areas like the Barre-Montpelier Road, as long as they meet FEMA standards.

The town’s Planning Commission has looked for direction from the Select Board. Board members generally agreed the revision would be acceptable though it won’t happen overnight and will require voter approval.

The commission briefly discussed the proposed change last week and is expected to warn a public hearing before making a recommendation to the Select Board. Once that happens the board must hold a public hearing of its own and decide whether to schedule a vote. Given the warning requirements for public hearings and special elections, that process could take months, Schulz said.